This morning UK Retail Sales figures were released, and they were much better than expected, showing the post Brexit period might not be as bad as analysts had predicted. Markets thought that the figure for July would only show a gain of 0.2%. The actual figure was an impressive 1.4% up, and the annual figure was 5.4% higher. Retail Sales are a very good barometer of the overall health of the economy, and shows that consumers are still pretty confident. The market reacted immediately and GBP/EUR rates shot up by a cent, recovering most of the weeks losses to sit in the mid €1.16’s:
In some other positive news, there has been other news that Britain’s economy won’t go into recession, and global growth seems to be stabilising according to the ratings agency Moody’s.
We all know that the Pound plummeted in the immediate aftermath of the EU Referendum, but stock prices have recovered and many economists believe the effect on the economy won’t be anywhere near as bad as the doom mongers had predicted. The lower Pound will help exports and in turn support economic growth. They also said that the EU economy is likely to grown in line with the UK at around 1.5% this year.
Focus might start to shift to the US elections and the fact there might be another interest rate hike in the USA however. If this happens, the Pound and Euro would likely weaken while the USD strengthens, risking a further fall for Sterling exchange rates.
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Today’s news will be welcomed by those that need to buy Euros or any other currency with Sterling, however the economy is still very fragile and exchange rates are still at risk of sharp movements in either direction. We can help you achieve fantastic rates of exchange, and also have various types of contracts to protect against adverse exchange rate movements.
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